The microRNA-group of genes of C. elegans is required to control the timing of larval development and neuronal patterning. A predominant number of these genes are conserved in mammals and recent experiments demonstrated a role for them in modulation of hematopoietic differentiation and cancer. Our biochemical characterization of microRNA pathway revealed the association of the RNase III enzyme Dicer with the oncogenic protein TRBP. Dicer is the enzyme responsible for the generation of mature microRNA and processing of exogenous double-stranded RNA to short interfering RNAs (siRNAs). Biochemical analysis of TRBP-containing complexes not only confirmed the association of TRBP and Dicer but also uncovered the presence of Argonaute 2, the catalytic engine of RNA-induced silencing complex as a stable component of Dicer/TRBP complex. We hypothesize that these three proteins form the core of a complex responsible for processing and execution of RNAi response. We also uncovered evidence indicating that the 60S ribosome subunit associates with TRBP to form a complex involved in mediating microRNA-directed translational repression. Aim 1 will define the function of Dicer/TRBP complex in the genesis of siRNA/miRNA and begin to examine the role of individual proteins and their domain structure in the regulation of siRNA/miRNA processing activity. Aim 2 describes the detailed functional analysis of the association of Dicer/TRBP complex with the effector complex containing the Ago2 subunit and delineates the role of individual proteins in the functioning of the posttranscriptional gene silencing. Aim 3 extends the work to the analysis of the large TRBP- containing complex, which is associated with the 60S ribosome subunit and the human Armitage protein involved in translational repression.